The Accumulation of Capital

THE following diagrams illustrate those parts of the foregoing
analysis that can be expressed in two dimensions. It is impossible
to illustrate in one plane both relations (such as the ratio of capital to
labour) and movements through time (such as the accumulation
of capital). Relations can be illustrated in terms of comparisons of
static positions. For this purpose we imagine that we are comparing positions in each of which the stock of capital goods is being
maintained, item by item, and the flow of output is being consumed.
Differences in annual profits are accounted for by differences in the
expenditure of rentiers. Output consists of commodities produced
in fixed proportions, and is measured in units of a composite
commodity consisting of a representative sample of production.

THE TECHNICAL FRONTIER

The basic diagram to illustrate the relations of labour and
capital is adapted from that used by Wicksell.1 The vertical axis
represents output per annum measured in units of the composite
commodity. The horizontal axis represents stocks of capital goods
measured in terms of the labour time required to produce them,
reckoned at a given notional rate of interest. The amount of labour
currently employed is taken to be constant, so that the vertical axis
represents output per man-year and the horizontal axis represents
the real-capital ratio. In a given static position with a given rate
of profit which has long been ruling and is expected to rule in the
future, we may represent the spectrum of known techniques in
terms of output per head and the real-capital ratio, when the notional
rate of interest entering into the cost of capital goods is equal to
the rate of profit. OA is the output per man-year produced when
all workers are employed with Alpha technique; OB the output
with Beta technique, OC the output with Gamma technique and OD with Delta technique. Ob is the cost in terms of labour time,
at a notional rate of interest equal to the ruling rate of profit,
of an outfit of capital goods which employs a man with Beta technique. Between Oc and Ob lie stocks of capital goods with a rising

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